Asia Stocks Fall, China Trade Highlights Slowdown

Asia Stocks Fall, China Trade Highlights Slowdown

Asian stock markets were mostly lower Monday after China’s trade figures underlined a slowdown in the world’s No. 2 economy. Hong Kong’s Hang Seng fell 0.4 percent to 21,001.87 and South Korea’s Kospi lost 0.7 percent to 2,004.24. Australia’s S&P/ASX 200 fell 0.3 percent to 4,199.80. Benchmarks in Shanghai, Taipei and Manila were also lower but Japan’s Nikkei 225 index rose 0.3 percent to 9,960.79.

On Saturday, China reported its biggest monthly trade deficit in at least a decade in February as imports rebounded after a Lunar New Year holiday slowdown in January, but the combined figures for both months showed growth in imports and exports decelerating markedly.  January-February export growth slowed to 6.9 percent over the same two-month period last year, barely half of December’s 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December’s 11.8 percent.

The numbers suggest China’s manufacturers are being hit by weaker overseas demand amid Europe’s debt crisis. Weaker growth in Chinese imports, meanwhile, could have a ripple effect throughout Asia. Investment sentiment was also tempered by news that Greece’s debt reduction deal with private creditors could cause losses for banks after the International Swaps and Derivatives Association, the private organization that rules on such cases, ruled that a “restructuring credit event” occurred.

That means Greece’s debt relief will trigger payouts of so-called credit default swaps, a type of insurance on bonds. But the ISDA said overall payouts will be significantly below the $3.2 billion in net outstanding credit default swap contracts linked to Greece. The exact level of payouts will be determined on March 19. A multibillion euro bailout, which Greece needs to avoid imminent bankruptcy, was contingent upon the successful completion of the debt restructuring deal.

On Friday, Wall Street closed modestly higher after the government’s monthly report on employment bolstered hopes that the economic recovery is on track. The Dow on finished up 0.1 percent at 12,922.02. The Standard & Poor’s 500 gained 0.4 percent to 1,370.87. The Nasdaq composite average gained 0.6 percent to 2,988.34.  Benchmark oil for April delivery was down 60 cents to $106.80 in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents to settle at $107.40 per barrel in New York on Thursday.  In currencies, the euro fell to $1.3095 from $1.3116 late Friday in New York. The dollar fell to 82.14 yen from 82.52 yen.

Source: The New York Times (March 11, 2012)

Vanez Intania Kinanti

20209914

3 EB 09

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